2014 (4) TMI 189 - AT - Central Excise

Tribunal Grants CENVAT Credit for Commission & GTA Services, Appellants Prevail

M/s INTERPLEX ELECTRONICS INDIA PVT LTD & OTH. Versus COMMISSIONER OF CENTRAL EXCISE, BANGALORE

The Tribunal ruled in favor of the appellants on both issues. Regarding entitlement to CENVAT credit on services by commission agents, the Tribunal found ... Availment of CENVAT Credit - Whether, appellants were entitled to CENVAT credit on the services provided to them by commission agents (procurement of purchase orders on commission basis) during the periods of dispute (April 2007 to March 2008 in the case of the first appellant and April and May 2007 in the case of the second appellant) - Held that:- The period of dispute in the present case is prior to 01.04.2008, the date on which a significant amendment was brought to Rule 2(l)(ii) of the CCR. The Hon'ble High Court held that, notwithstanding the Board's clarification in Circular No. 97/8/2007-ST dated 23.08.2007, transportation of final products from the place of removal stood within the ambit of the definition of input service prior to 01.04.2008. The benefit of the High Court's decision in [2011 (3) TMI 248 - KARNATAKA HIGH COURT] is available to the appellant - Decided in favour of assessee. Issues:1. Entitlement to CENVAT credit on services provided by commission agents.2. Admissibility of CENVAT credit on GTA service for outward transportation of finished goods.Issue 1: Entitlement to CENVAT credit on services provided by commission agents.The judgment addresses the question of whether the appellants were entitled to CENVAT credit on services provided by commission agents during the disputed periods. The Tribunal found that the issue was already settled in favor of the appellants by previous decisions, including the case of Ambika Overseas where the High Court upheld the Tribunal's decision that CENVAT credit was admissible on services provided by overseas commission agents. Additionally, the Tribunal referred to the case of Metro Shoes Pvt. Ltd., where it was held that services rendered by commission agents fell within the definition of 'input service' under the CENVAT Credit Rules 2004. Therefore, the common issue of entitlement to CENVAT credit on services provided by commission agents was decided in favor of the appellants.Issue 2: Admissibility of CENVAT credit on GTA service for outward transportation of finished goods.The judgment also dealt with the question of whether CENVAT credit on GTA service for outward transportation of finished goods was admissible to the appellants. The Tribunal referred to a previous appeal filed by the same assessee where a similar issue was decided in their favor. The Tribunal reproduced paragraphs from the final order of that appeal, highlighting that transportation of final products from the place of removal was considered an input service before a significant amendment to the CENVAT Credit Rules in 2008. The Tribunal noted that the High Court upheld the decision that transportation of final products fell within the definition of input service. As a result, the Tribunal set aside the impugned order and allowed the appeal, thereby granting the appellants the benefit of CENVAT credit on GTA service for outward transportation of finished goods. Consequently, both appeals were allowed in favor of the appellants.